Wine war fears already slowing French exports to China

Asian buyers discuss with a French wine producer during the Vinexpo trade fair in Bordeaux, southwestern France, on June 17, 2013. Chinese wine importers have already started putting orders from France and other European countries on hold over fears of a hike in tariffs being triggered as part of a broader EU-China trade dispute, say leading figures in the sector.
(AFP)

People taste wines during the Vinexpo trade fair in Bordeaux, southwestern France, on June 17, 2013.
(AFP)

BORDEAUX (AFP) – Chinese wine importers have already started putting orders from France and other European countries on hold over fears of a hike in tariffs being triggered as part of a broader EU-China trade dispute, say leading figures in the sector.

Industry insiders attending this week's Vinexpo exhibition in Bordeaux revealed that China's decision to launch an anti-dumping investigation into European wine has created a backdrop of uncertainty that has resulted in buyers sitting on their hands.

"The simple fact that the announcement of an investigation has triggered a wait-and-see attitude from our Chinese customers who prefer to postpone deliveries rather than take the risk of seeing them subject to additional duties when they arrive in two months time," said Georges Haushalter, the chairman of the CIVB Bordeaux wine trade body.

Bordeaux stands to be hit far harder than any other producer region in Europe in the event of China's anti-dumping probe leading to punitive duties on French exports to a fast-growing and potentially huge new market.

China is Bordeaux's biggest export market and takes around one in five of the bottles produced in the renowned area, where up to 55,000 jobs depend on the sector.

That has led to frustration at how the sector has become caught up in a trade spat in which China appears to be seeking to punish France for its high-profile support for a move by the EU to impose anti-dumping duties on Chinese solar panels.

"We would like not to be held hostage to those discussions but while we wait for them to be resolved there is already an impact on the market," said Bernard Farges, the president of a group representing a number of Bordeaux wine producers.

"We are already seeing a slowdown in sales, or an increase in orders being delayed, even though absolutely nothing has been concluded or decided," he said.

A major exporter of Bordeaux wines to China said some Chinese importers, many of whom are already sitting on significant stocks, were looking to cash in on the current uncertainty.

"There are 8,000 wine importers in China. Many of them have come from other market sectors and the market still needs to find a proper structure. The pipes are a bit blocked at the moment and some are trying to take advantage to push prices down," the merchant told AFP on condition of anonymity.

On a visit to Vinexpo earlier this week, French Trade Minister Nicole Bricq attempted to reassure winemakers that punitive Chinese duties remain a distant prospect.

"There is no trade war with China, there are global rules for trade and they have to be respected," she said. "China's anti-dumping investigation will take six to eight months, that gives us plenty of time to negotiate with them."